Presenter Information

Start Date

10-12-2017 12:00 AM

Description

Amongst the growing body of literature on the drivers of online ratings, the influence of customers’ local offline environment on their ratings has largely been neglected. This study examines the relationship between ratings made outside of a customer’s home area and the magnitude of online ratings. We employ a data-driven identification of a customer’s geographic home area and use variation in this variable to identify the consequences for the magnitude of ratings. In line with our theory, we find that customers who rate while traveling give, on average, higher ratings than locals. However, this relationship is moderated by the posting time of a review relative to consumption, as travelers post more negative ratings during or shortly after consumption. These relationships are most pronounced for customers who travel and rate less frequently. Our results come with substantial implications for a business’s average rating and for customer decision making.

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Amongst the growing body of literature on the drivers of online ratings, the influence of customers’ local offline environment on their ratings has largely been neglected. This study examines the relationship between ratings made outside of a customer’s home area and the magnitude of online ratings. We employ a data-driven identification of a customer’s geographic home area and use variation in this variable to identify the consequences for the magnitude of ratings. In line with our theory, we find that customers who rate while traveling give, on average, higher ratings than locals. However, this relationship is moderated by the posting time of a review relative to consumption, as travelers post more negative ratings during or shortly after consumption. These relationships are most pronounced for customers who travel and rate less frequently. Our results come with substantial implications for a business’s average rating and for customer decision making.